By Katherine Hamilton
Altria posted higher sales in the first quarter as its cigarette business performed better than expected.
The company's smokeable business, which includes the Marlboro brand, recorded a slower decline in volumes. Domestic cigarette volumes fell 2.4% compared with the estimated 4% drop across the industry, Chief Executive Billy Gifford told analysts Thursday.
The stock rose to a nine-year high of $73.85 at one point, before trimming those gains to post an advance of 6.6% at $72.70 per share. That pushed shares to 26% gain in the past year.
Gifford attributed the improvement in the cigarette business in part to a crackdown on illegal flavored disposable vape products. The number of consumers who vape has held steady in the past year, and the number of e-vapor consumers declined modestly.
"We've seen some go to nicotine pouch, we've seen some come back to cigarettes," Gifford said of consumers in areas where e-vapes are getting harder to access.
Altria posted a profit of $2.18 billion, or $1.30 a share, in the quarter ended March 31, compared with $1.08 billion, or 63 cents a share, a year earlier.
Stripping out certain one-time items, adjusted per-share earnings were $1.32, ahead of the $1.25 anticipated by analysts, according to FactSet.
Revenue rose 3.2% to $5.43 billion. Analysts surveyed by FactSet forecast revenue of $4.58 billion.
More smokers are trading down to cheaper cigarette brands, as Altria's discount segment gained 2.4 market share points, Gifford said. The pressure from rising prices on fuel related to the Iran war is driving more smokers to trade down, he said.
"You are seeing a growth in the discount category within the cigarette segment, and that is driven by the macroeconomic difficulties that the consumer is facing," Chief Financial Officer Sal Mancuso said.
Management now expects sales growth will be balanced throughout the year, whereas executives were previously expecting the first half of the year to be slower than the second. Like many consumer-facing companies, Altria is keeping a close eye on consumer confidence.
"The strength of the consumer, it's the wild card with the economic outlook the way it is with higher gas prices and stuff," Gifford said.
Write to Katherine Hamilton at katherine.hamilton@wsj.com
(END) Dow Jones Newswires
04-30-26 1156ET
